Cardano Developer Seeks Reduced Funding of $46.8 Million for Expansion and Bitcoin DeFi Integration

Input Output, the company responsible for building and maintaining the Cardano blockchain, is seeking approximately half the funding it requested in the previous year from the project's community treasury. The company has submitted nine proposals totaling $46.8 million for 2026, down from $97.5 million in 2025. Several of these proposals focus on enhancing Cardano's scalability to increase its transaction processing capacity and exploring opportunities in Bitcoin DeFi. Cardano, like other major blockchains, has a communal fund fueled by network fees, which community representatives vote to allocate toward development projects. Historically, Input Output has been the largest recipient of these funds due to its significant role in employing engineers who develop the underlying software. However, the company now aims to reduce its annual funding request, with the goal of becoming self-sufficient on its own revenue and allowing community funds to support a broader range of smaller engineering groups. By the end of 2026, Input Output expects smaller, specialized teams to take over most of its in-house work, including firms like VacuumLabs and Midgard Labs that focus on specific aspects of the Cardano software. The nine proposals can be grouped into two main themes. The first theme involves a consensus upgrade called Leios, which Input Output claims will increase Cardano's transaction processing capacity by 10 to 65 times, aiming for over 1,000 transactions per second. This would significantly enhance Cardano's competitiveness with other blockchains like Solana and Ethereum's layer-2 networks in terms of throughput. Leios is scheduled for a test release in June and full deployment by the end of the year. The second flagship proposal involves a system called Pogun, designed to bring Bitcoin-based decentralized finance to Cardano. This system would enable bitcoin holders to borrow and earn yield on their holdings through Cardano without needing to rely on a centralized intermediary. Pogun's lending component is targeted for public release in the second quarter. Other proposals cover improvements to Cardano's smart contract engine, security testing infrastructure, developer tools, and expanded API services. Each proposal outlines specific delivery leads and ties funding to delivery milestones, rather than releasing funds upfront. Voting on these proposals begins on Tuesday and will run through May 24, with decisions made by approximately 1,000 elected delegates known as DReps, who represent ADA holders. The outcome of the vote will test whether Cardano's governance treats Input Output like any other grant applicant or continues to approve its requests based on its historical role in the project. Last year, Input Output's $97.5 million proposal was approved, but since then, the Cardano Foundation has taken over the project's grant-funding arm, and Intersect has assumed stewardship of core Cardano software. These changes mean that alternatives to Input Output now exist, potentially influencing the voting outcome. Input Output also highlighted progress in the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which reached 14.6 million tokens in circulation within weeks of its launch. The total assets deposited on Cardano increased from $137.5 million to $142.7 million over the same period. The outcome of the vote will signal how much the Cardano community's perspective has shifted, now that there are tools in place to fund development without relying solely on Input Output.